10:37 AM EST, 12/20/2024 (MT Newswires) -- The Consumer Financial Protection Bureau said Friday it was suing the operator of Zelle, Early Warning Services, and three major banks, Bank of America ( BAC ) , JPMorgan Chase ( JPM ) , and Wells Fargo ( WFC ) , for allegedly failing to protect consumers from fraud on the Zelle payment network.

Customers of these banks have lost over $870 million in the seven years the network has been operating due to fraud, the Bureau said.

The lawsuit claims that fraud complaints were ignored or mishandled, and customers were often told to contact fraudsters directly. The Bureau is seeking to stop these practices, obtain compensation for affected consumers, and impose penalties, it said.

"The nation's largest banks felt threatened by competing payment apps, so they rushed to put out Zelle. By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves," CFPB Director Rohit Chopra said.

Bank of America ( BAC ), JPMorgan Chase ( JPM ), Wells Fargo ( WFC ), and Early Warning Services didn't immediately respond to MT Newswires' requests for comment.

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